Servias Ministries Blog

The Canadians have figured it out.

Watch the following:

Canada: Conservative 2013 Budget May Allow Banks to Confiscate Customer’s Deposits

See: http://canadiantimes.ca/ct2/index.php/canada/504-conservative-2013-budget-may-allow-banks-to-confiscate-customer-s-deposits

Do you really think the U.S. won’t implement this popular strategy as well?  All the G20 countries are in this together.  Is there really safety in numbers?

I am adjusting my 2nd potential smackdown gold price to the $1,100 to $12,50 range, $18 to $21 for silver.  Clearly, these are paper market spot prices.

My assumption is this.  The markets are managed by the collusion of central banks.  The global economy is slowing.  The drop in precious metals coincided with the announcement that growth in China had slowed down. In Cyprus we see that insured deposits are being used for planned bank resolutions. The Bank of England and Fed recently published an overview of how this would happen.  Investors, uninsured depositors and creditors are the ones at risk.

Uninsured depositors and creditors in the fixed income markets (including your large pension funds) are worried.  If they become too worried, where would the logical place to direct their funds be?  Physical precious metals. From the central planner perspective, the last thing you want to happen is for the price of gold to skyrocket while your are attempting to keep people’s money  in the banks. They don’t want gold to replace bonds as a the safe haven.  If that did happen, the bond market would disintegrate.

So the question becomes: “How do you dissuade people from moving their deposits into gold?”   Make gold look riskier and more dangerous than an FDIC-insured deposit. You do a takedown on the price of gold.  The central planners want to keep the trillion dollar bond market going where nobody is earning any money.  They must use fear of loss as their primary tools to keep the current system in place.  They need to make the bond market and stock market look more stable than the alternative thus they need to make gold look too volatile for the average person to move their wealth from the bank to the precious metals.  They must attack the price of gold and silver and promote fear in those investments at the same time they are promoting safety in fiat currency-based investments.

This is a game of epic proportion.  The central planners will use every tool in their bag of tricks in an attempt to keep the current system afloat.  Their ship is taking on water that cannot be successfully pumped out.  The endgame is at hand.

Central planners have used fiat currency to transfer wealth for their use.  Their endgame is to convert their wealth to sound money and leave the masses holding the bag (containing worthless paper).  By smashing the price of gold down, they want to convince the precious metal holders to sell their positions.  Remember, for every seller there is a buyer.  Using the whipsaw technique in the markets helps the big players free up the underlying asset from the small, fearful trader.

If I am wrong then the price of gold will not move under $1,400 again.  If I am correct in my assumption, another one or two great buying opportunities is ahead for gold, silver, and related stocks.  Only Our Heavenly Father knows for sure.

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As Central Banks continue to buy equities and prop up the market, the hole they are digging continues to deepen.  This is a strong indication of desperation among the money printers of the world.  They are buying stocks with money they printed out of thin air.  This will only temporarily inflate the various stock exchanges and it will end badly.  What this tells us is that the Dow Jones Industrial Average does not reflect true demand for stocks and misleads the average investor on the health of the market.  The investor responds by putting hard earned money in a market that could collapse at any time and cause his life savings to evaporate.

The Cyprus Solution has now been implemented, and they have been hosed.  “The Bank of Cyprus, the island’s largest bank said it has converted 37.5% of deposits exceeding 100,000 Euros into a Class A share, with an additional 22.5% held as a buffer for possible conversion in the future.  The flushing of Cyprus was done to steal massive funds from depositors.  The major percentage of their funds taken were replaced by worthless stock in a bankrupt bank.  Another 30% will be temporarily frozen and held as a deposit. So the amount of money that has been taken from the Cyprus depositors is in all practicality almost their entire accounts. Major depositors funds have now been taken in grand style. ”

What does this mean to you and me?  Depositors have been converted to unsecured “lenders” to the bank.  You may say “I don’t have $100K in a bank.”  If you are part of a pension plan, IRA, or 401K with a broker, you may be at risk.  Why?  They make keep large deposits with a major bank at risk.  The system is so interconnected now that you have no idea of the impact of a “bail-in” to your retirement account.  This exposure is also true for major public corporations’ operating cash whose stock is traded on the NYSE.  The systemic risk is substantial.

Elsewhere in central bank intervention, the paper volumes in the gold paper market do not reflect what is happening in the physical market.  Demand for physical is probably 60% greater than supply.  The offset is an increase in premium over spot price.

What does this suggest?  $3,000 gold and $100 silver is now within view.  As we buy our few ounces each month, we should understand thousands and thousands of others across the globe are doing the same thing.  This will help keep the price firm and support a move upward.  China and Russia continue to be buyers and we may find that April will be an extremely active month for those Sovereigns.

I believe that the central planners are losing the war even though they seem to be winning some of the battles.  Gold & silver stocks have a very favorable leverage position as the price of the underlying metal improves.

The silver market is extremely tight.  The $7 premium when silver is $23 makes up for the paper market.  That would indicate the physical market is moving away from the paper market pricing.  As that continues, the paper market is at risk of being nonfunctional.

People from Cyprus, Iceland, Argentina, and Japan would have had much safer portfolios if they had adequate exposure to the precious metals.  The risk to us all is this:  one extreme is hyperinflation, the other extreme is financial collapse.  Keeping the economy away from those extremes is getting increasingly difficult for the central banks’ manipulative efforts.

Think about it.

I continue to marvel at what men will think up next to support the lawlessness of the global financiers.  It is apparent that most of these people do not know what “hard-earned” money really is.  Men who never truly worked for a paycheck have little understanding the pain they are about to on the masses.  The global economy is moving close to the edge of a hyperinflationary depression:  Prices go up exponentially (in terms of fiat currency) while output and demand decrease dramatically.

In 1989 (not that long ago), Yugoslavia went through a period of hyperinflation.  The following bank note provides us a reminder of what can happen to fiat money:

Peak inflation rate hit 313 billion percent.  Those who held physical assets retained value versus those with paper assets.

At the same time the global economy is eroding, the “technology” revolution has led us to believe our lives are better when in fact those “efficiencies” simply eliminated jobs at an overall cost to society.

James H. Kunstler recently wrote:

We’ve Become a Society of Self-Deluded Children

The most obvious example is what happened to the telephone over the past thirty years. We computerized every phone system in America to “improve communications.”  The net effect is that after all that time and expense (billions of capital investment), it is now nearly impossible to get a live human being on the phone, whether you are calling a Fortune 500 corporation, a non-profit charity, or your best friend. Has that improved communication? What you get instead are robots that waste big chunks of your time forcing you to listen to complex call-routing menus – often ending in futility.

Companies and institutions assume that they benefit from the “efficiency” of not having to pay gangs of human receptionists. But they only succeed in annoying their customers and clients, who are treated as pests to be avoided. In effect, phone systems became firewalls, not communication enhancers.

Add to that the more recent phenomenon of cell phones and smart phones, which, for all their charms, 1) don’t work in all locations, 2) drop calls frequently, 3) have lousy sound quality, 4) feature time delays that make people talk over each other constantly, 5) erode real-time social relations with distracting apps and web features, and 6) possibly harm people’s brains by constantly rinsing them in microwaves.

The lack of wisdom among men is reaching a crescendo.  Complexity has masqueraded as progress whereas instead we should be moving toward simplicity.  There will be a price to pay for the road taken.  Judgment will come to rebalance the books.  Disequilibrium will not be tolerated indefinitely.  In the meantime, enslavement will continue under Mystery Babylon’s rule.  We will continue to see failure and unworkable solutions so that when the true solution arrives, we will know it.

How long will the innocent pay for the guilty?  Until Our Heavenly Father’s Kingdom encompasses the globe.

The paper market for gold & silver continues to unravel as individuals around the world are buying up the physical metal at the lower prices.  However premiums have risen, especially for silver.  I spoke to one dealer who has a $7 premium over the silver spot price which makes your cost right at $30 for an ounce of silver versus $23 on the paper market.

There have been widespread reports of people attempting to get their “allocated” gold but have been unable to acquire it.  Allocated gold is held in a vault specifically with your name on it.  The contract indicates that there is no accessibility to it by anyone else.  It appears that this is not the case.  The gold depository may have hypothecated the gold (pledge without delivery or title of possession) and generated revenue for its own account.  Once gold gets pledged, it can be hypothecated 100 times over, almost like fractional banking.  To unravel all of this mess, participants may have to go into the market and buy back gold at a higher price.  Others will settle for cash.  Either way, owners of the gold will not be happy campers.  Litigation will result.  This will expose the lies and deception behind the paper market.  To rectify the situation, I ultimately expect the price of gold and silver to climb rather dramatically.  If and when it happens, we will look back at this period and marvel at the attempts of the central planners to extract wealth from the masses.

500 tons and 53,000 contracts were sold into the gold market to force the price down in record time.  This orchestrated attack on the price of gold (and silver) appears to be the focused attempt to remove the canary in the coal mine.  Once again, it appears that they have failed just like everyone else who has made similar attempts over the last 5,000 years.

Will they try a second time?  I expect so.  Should we expect a double witness?  A triple witness?  Who has the greatest determination?  The Kings of the East are known for their patience.  Could we see $1260 gold and $19 silver?  Only with a notable premium if you take possession.  In the end, the true value will prevail and the fiat currency will suffer.  Volatility will continue until the new equilibrium is attained.  If you own gold or silver, your emotions will be tested, possibly to the extreme until the new equilibrium is established.